TORONTO -- Shareholders of Home Capital Group Inc. (TSX:HCG) voted against Warren Buffett's additional investment in the alternative mortgage lender, keeping the legendary investor's stake at 19.99 per cent.
At a special meeting on Tuesday, more than 88 per cent of shareholders rejected a plan that would have seen Buffett's Berkshire Hathaway acquire 23.9 million more shares for $246.7 million, at $10.30 per share.
That would have been on top of Buffett's initial Home Capital investment of $153 million in June.
Home Capital shares were down 18 cents at $13.90 in early on Tuesday morning before trading was halted pending the announcement.
Buffett's backing and extension of a $2-billion credit facility to Home Capital in June helped restore investor confidence after the alternative mortgage lender faced a partial run on its deposits following regulators' accusations that the company misled investors.
The mortgage lender's board unanimously recommended that shareholders approve the additional investment.
However, Home Capital shareholders were mixed on Buffett's second tranche of investment, with some arguing that the additional investment would be too dilutive and provide few additional benefits.
The rejection follows a recommendation by Institutional Shareholder Services that shareholders vote against the proposal.
The influential proxy advisory firm said that when it was announced, the second round of equity investment from Berkshire seemed the best available alternative for stabilizing Home Capital.
But since then, ISS said, the company has made substantial progress such as board and management renewal, Ontario Securities Commission and class action settlements, asset sale, dividend suspension, repayment of Berkshire's line of credit and restoration of deposit inflows to historical averages.
Bagikan Berita Ini
0 Response to "Home Capital shareholders vote 'no' on second tranche for Buffett investment"
Post a Comment